LANSING, Mich. (8/22/12)--The Michigan Commissioner of Financial and Insurance Regulation has signed an order authorizing credit union service organizations (CUSOs) to provide small-business equity investments to Michigan credit unions and their members. That is a landmark move for the credit union industry, according to the Michigan Credit Union League (MCUL).
The action comes after months of proactive advocacy by the league on behalf of the state's credit unions and CUSOs.
"This is an unprecedented step forward for credit unions," said David Adams, CEO of MCUL. "Business investing authority has tremendous potential benefits to credit unions and to the small business community at large. It is further proof that there is nothing small about the credit union commitment to supporting small businesses. MCUL and CUcorp plan to work aggressively with our credit union community on a structure and business plan that will take advantage of this new opportunity. CUcorp is well-positioned to facilitate this."
"It is necessary and proper for CUSOs to offer small-business equity and venture-capital- investment administration and related services to its member credit unions and their respective members," noted Commissioner R. Kevin Clinton in his ruling, based on a review of applicable laws, and considering safety and soundness.
In October, MCUL began the process necessary to achieve the new authority through the existing regulatory process, without any statutory amendments.
The new authority allows state-chartered credit union investment in CUSOs that provide investment administration and other services related to small-business equity or venture-capital funding.
The Credit Union National Association (CUNA) and credit unions are urging Congress to increase credit unions' MBL cap to 27.5% of assets from 12.25%. Doing so would open up more opportunity to offer MBLs, inject $13 billion in business loans into the economy and create as many as 140,000 new jobs, with no cost to taxpayers, CUNA said.